Looking to the Future of Retail Pricing at Insight at Engage 2022

Highlights from the pricing experts and leading retailer speakers at Insight at Engage, our annual customer conference

What a week it was in Scottsdale at Aptos Engage 2022! As successful as our last two virtual customer conferences were, there’s just nothing like gathering face-to-face. Though I’ve been with Revionics for two years now, this was my first chance to meet many of my coworkers in person, let alone any of our customers. The excitement of having everyone together for the first time in a long time certainly created an atmosphere that will be hard to beat in the years to come when physical events are the norm again.

If you couldn’t join us for Engage, you missed four days of thought-provoking sessions, beautiful dessert views, and fun networking. It was also the first time we brought the Revionics portion of the event, Insight at Engage, to life in person. To see what pricing topics were top of mind this year, check out the highlights from just a few of our Insight at Engage sessions below.

Insight Opening Remarks: Growth + Innovation

Revionics GM, Scott Zucker, kicked things off for Insight at Engage with a review of the last year and a look at what’s ahead for retail and for Revionics. While 2022 is already adding its own challenges to those still lingering from 2021, the overall sentiment is that retailers are now better prepared to do battle after two years of disruptions.

Studies show a key part of that preparation is Artificial Intelligence. According to RSR, 82% of retail winners see AI as essential to driving business improvements moving forward, while Gartner reveals pricing is the number one AI investment for retailers today*.

As the world of retail continues to evolve, Revionics is evolving with it. At the end of Zucker’s remarks, Revionics SVP of Science – Product & Development, Mike Ryan, took the stage to share a high-level look at the latest product innovations. From a partnership with Google, improved reporting and insights, and hands-off-the-wheel AI, Revionics is investing heavily in continuing to drive value for our retailers and redefining the future of unified retail pricing.

Omnichannel Commerce vs Localized Pricing

In a lively debate moderated by Brian Kilcourse of RSR, two of our retail experts explored whether or not omnichannel transparency will be the death of localized channel pricing as we know it.

First up was Revionics’ Senior Director of Retail Innovation, Matt Pavich, stating his impassioned case for why localized pricing is as crucial as ever. Pavich pointed out that over time, retail has moved towards more differentiation, not away from it. He also argued that localization allows retailers to better meet the needs and preferences of their customers across different locations and channels. Today’s technology allows retailers to set prices on a granular level that will benefit both customers and the retailer.

In his rebuttal, Aptos’ Vice President, Solution Principal, Unified Commerce, Mike Hughes, challenged the feasibility of a retailer utilizing localized channel pricing without eroding consumer trust. With ecommerce and omnichannel commerce, he argued, pricing transparency is higher than ever. And with the disruptions of the last two years, consumer loyalty is particularly low. “It’s all about trust,” Hughes said. “With differentiated pricing, you could be sacrificing the lifetime value of the customer for a short-term profit.”

So, who won the debate? You’ll have to read our full recap to find out!

Pricing at the Speed of Retail

While we worked hard to pull together a full day of engaging sessions, there’s no denying there was a definitive attentiveness and curiosity throughout the room while REMA 1000 was on the stage. Partap Sandhu, a Pricing Analyst at REMA 1000, started by sharing how important it is for the grocer to be a low-price leader in the hypercompetitive Norwegian market.

To give you an idea of how competitive, the Oslo area has an average population of 1980 customers per store, and no less than 80 grocery stores within a 10-minute drive. In addition, Norwegian consumers shop on average 3.3 times a week, compared to 1.6 times a week on average in the United States.

To stay on top, REMA 1000 leverages a suite of technologies including Revionics and Electronic Shelf Labels (ESLs) to unlock truly dynamic pricing. From the point of detection of a competitor price change, REMA 1000 can implement the new price on the shelf and at point-of-sale at a speed unheard of by most retailers. And that enables them to take 100s of new prices per day, per store.

When speaking about what’s next for REMA 1000, Sandhu expressed a goal of pricing 100% of their sales through Revionics. If you’d like to learn more about how Revionics is further reducing the pricing cycle time and enabling reports and analysis at the speed of pricing, our Sr. Analyst, Retail Innovation, Sneha Elango, would love to tell you all about it.

Putting Markdown to Work for You

Markdowns are often a bit of an afterthought in the world of retail pricing. Yet, we brought together two pricing experts for a candid conversation that could change that perception. Revionics’ Aditya Rastogi was joined on stage by Steve Luoma of Academy Sports + Outdoors to discuss how they leverage markdowns.

Luoma shared the important role that markdowns play in Academy’s overall pricing strategy, and how they get the best use out of the Revionics Markdown tool. He also discussed how they encouraged adoption within the organization. “At the end of the day, the proof is in the pudding,” Luoma said. “When you start doing some testing and showing them the numbers, it's an easy sell to the merchant.”

The conversation then moved to how the retailer’s strategies have shifted over the last couple of years of disruption. Luoma mentioned the need to be nimble and the value of being able to run scenario simulations in such an uncertain landscape. “It was really a strange dilemma where we had to pivot right in the middle of a season full of inventory shortages,” he said. “So we had to get creative and do a lot of what-if scenarios.”

Looking to the future, Luoma acknowledged that the new normal is still a mystery. But one thing he knew for certain – markdowns would still play a strategic part in the pricing journey.

 

Managing Retail Disruptions

Pavich took the stage again to talk about some of the major disruptions in retail today, specifically covering how our customers can use Revionics to mitigate the impacts of those challenges. While there are certainly more issues retailers deal with today, Pavich chose four of the most challenging to focus on, the “four horsemen of retail disruption”, as he put it – supply chain disruptions, labor shortages, omnichannel acceleration, and inflation.

While none of these challenges are new, the retail landscape around them has changed, making each more difficult to manage. Retail moves faster than ever, competition is fiercer, problems and solutions are more sophisticated, and both consumers and retailers have more data at their fingertips than before.

But with the right tools, strong data-led strategies, and a balanced optimization approach, retailers can manage disruption and find that win-win pricing scenario for them and their customers. To sum it all up, managing pricing helps manage demand, which then helps manage retail, which helps manage disruptions.

More to Engage

For more highlights from Aptos Engage 2022, read this recap from Brian Kilcourse at RSR and check out our photos from the event. And customers, don’t forget to mark your calendars for Aptos Engage 2023 in Las Vegas, May 16^th – 19^th.

 

 

 

*Gartner AI Use Case Prism for Retail 2021